Moody’s rates Sydney Airport Finance notes Baa2

Moody’s Investors Service said it assigned a provisional Baa2 rating to Sydney Airport Finance Co. Pty Ltd.’s proposed $900 million Rule 144A notes.

The outlook is stable.

The proposed notes will rank pari passu with all the Sydney Airport senior secured debt and will be guaranteed by Southern Cross Airports Corp. Holdings Ltd., as well as Sydney Airport Corp. Ltd. and its subsidiaries, Moody’s said.

The proceeds will be used to reduce the company’s drawn bank debts and for general corporate purposes, the agency said.

The rating assigned to the notes reflects Sydney Airport’s strong market position and stable EBITDA margins, Moody’s said.

These features underpin the airport’s earnings stability and therefore enable it to sustain financial leverage higher than similarly rated Australian peers, the agency added.

The company’s credit profile further benefits from Kingsford Smith Airport’s high share of the international passenger market, which insulates Sydney Airport from the ongoing softness in the domestic passenger market, Moody’s said.

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